We Can't Rely on China for That, We Can't Allow Mercantilist Behavior, We Need to Do It

JP Morgan Chase CEO Jamie Dimon warned that the US dollar could lose its status as the world's reserve currency if America fails to maintain its economic and military dominance. "If we're not the strongest military in 25 years and the strongest economy, we won't be the reserve currency either, Dimon said on PBS' "Firing Line with Margaret Hoover, which aired over the weekend. "The world will be fragmented, and it'll be very dangerous for us, he added.

The dollar remains the world's dominant reserve currency, accounting for about 57% of global foreign-exchange reserves, down from around 70% at the turn of the century. The freezing of Russian central-bank assets after Russia's 2022 invasion of Ukraine fueled concerns that US financial sanctions could accelerate a shift away from the dollar, though Federal Reserve research has found no notable post-2022 shift out of dollar reserves. Dimon said maintaining America's edge also means reducing dependence on potential adversaries for strategically important goods, noting the US should have recognized 10 or 15 years ago that it was relying on China for rare earths, aluminum, certain types of steel, and other equipment.

"We can't rely on China for that, we can't allow mercantilist behavior, we need to do it here, we made a mistake, he said. Dimon also pointed to the war in Iran as evidence of another vulnerability: America's ability to sustain a prolonged war. The war in Iran has pointed out we didn't have productive capability to defend the United States if there was a real war that lasted for a long period of time, he said. In October, JP Morgan launched a $1.5 trillion, 10-year Security and Resiliency Initiative focused on industries crucial to US economic security, from critical minerals and advanced manufacturing to energy, defense, AI, and quantum computing.